Key senator expects
delay for gas-cap planSen. Menor says implementation
details need to be settled
Hawaii's law allowing the state to regulate gasoline prices probably won't go into effect as scheduled July 1, a key senator said yesterday.
"I think there's going to be a short delay," said Senate Consumer Protection Chairman Ron Menor (D, Mililani). "I would have concerns about any delay that would take longer than a year."
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More time is needed for the Public Utilities Commission, which would enforce the law, to establish rules and regulations and hire the personnel needed to oversee the price controls, Menor said.
At a time when gasoline prices are hitting record highs in Hawaii and across the nation, the law allowing the state to set a maximum price at which gasoline can be sold is scheduled to begin this summer.
The Legislature passed the law two years ago, but delayed implementation of the price controls to allow further study of the policy and provide time to make any necessary adjustments.
The law lets the state set a maximum price on regular unleaded gasoline sold at wholesale and retail levels based on average prices in Los Angeles, San Francisco and the Pacific Northwest. That formula embarrassed supporters last year when West Coast prices briefly went above the average Hawaii price and critics said the gas cap would have driven up prices in the islands.
Proposed changes include tying the maximum price to an average of prices nationwide, extending the cap to cover all grades of gasoline and applying it only to the wholesale price.
The Senate approved a measure to adjust the pricing formula but keep the implementation date of July 1. The House amended the proposal to delay implementation and further study the pricing mechanism.
Lawmakers have until Friday to work out a final proposal.
Menor said he was agreeable to some type of delay as proposed by the House, but added that he didn't want it to take too long.
"I'd like to, at this point, see a law implemented either for the end of this year or sometime early next year," he said. "My position has always been: The Legislature needs to pass a bill that's going to provide near-term relief to consumers from unreasonable gasoline prices."
If no proposal is worked out this year, or if a revised plan is rejected by Gov. Linda Lingle, the law would take effect on July 1, as it was passed in 2002.
Lingle has said she won't stand in the way of the price cap taking effect, but repeated yesterday that she doesn't like the legislation and she believes it will drive up prices and cause shortages.
"My guess is they are going to have to do something again with a future date," she said. "It's going to have to give us time to sort it all out."
The law allows the governor to suspend the cap if an economic analysis shows it would cause hardship.
Yesterday, AAA reported the average price for a gallon of regular unleaded gas in Honolulu reached $2.07; on the Big Island it was $2.18 and on Maui it was $2.42.
The nationwide average for all gasoline grades, including taxes, was nearly $1.86 a gallon last week, according to the Lundberg Survey of 8,000 stations nationwide.
